(The Center Square) – Some Republicans have recently introduced bipartisan legislation in the House and Senate aimed at addressing the federal deficit and ultimately reducing the federal debt, though opinions vary on whether Congress will make meaningful progress on the issue anytime soon.
At over $39 trillion, the debt today stands at roughly 124% of America’s GDP and is projected to grow faster than the GDP “for the foreseeable future,” according to the Federal Reserve Bank of St. Louis. A rising national debt can cause higher interest rates and contribute to inflation.
u.S. Rep. Bill Huizenga, R-Mich., introduced a resolution in the House of Representatives just days into the new year on Jan. 6 recommending that Congress commit to lowering the annual federal deficit (how much the government overspends) to 3% of the GDP by 2030. Right now, it sits at around 6%. The resolution was cosponsored by a number of Democrats and Republicans, and analysts from a broad range of think tanks and advocacy groups spanning the political spectrum support a 3% deficit-to-GDP target.
“The House is right to rally around a 3% deficit target,” said William Glass, policy director for the Millennial Debt Foundation, in a statement. “It isn’t a moonshot; it’s the minimum viable level of protection a modern economy needs to avoid drifting into a debt crisis.”
Comments from Alex Kilander, a policy analyst for the Progressive Policy Institute's Center for Funding America’s Future, echoed those made by Glass, calling the target a “commonsense goal.”
“[It] would begin to right the nation’s fiscal ship, reduce borrowing costs for households, and strengthen economic opportunity for all Americans,” Kilander said.
But resolutions, if passed, often simply express the opinion or intent of their chambers and are non-binding. They can lead to further action – like the introduction of actual law – or simply remain a symbolic gesture.
Zach Moller, senior director of the economic program for Third Way, a Washington, D.C.-based think tank, said resolutions can draw attention to an issue but in and of themselves, they don’t have the ability to hold lawmakers accountable.
“It’s better than a press release, but it is not impactful as some sort of forcing mechanism or some sort of legislation that would actually establish that,” Moller told The Center Square.
Sen. Kevin Cramer, R-N.D., recently introduced a bipartisan companion resolution in the Senate, and the House Committee on the Budget, chaired by Jodey Arrington, R-Texas, held a hearing on the subject in March.
Arrington spoke of a more generous goal of achieving a 3% deficit-to-GDP target in the next 10 years, urging Democrats to accept the proposition as a reasonable starting point.
“Let’s agree together… as proud lawmakers of the greatest country in the world, on this framework. Then we can debate the strategies and the inputs and what dials should move in what ways,” Arrington said.
Moller thinks it’s possible that the House resolution could pass by the end of the year, but passing enforceable legislation is “highly unlikely.” Such legislation has yet to be introduced, and Republicans and Democrats have such vastly different ideas of how to achieve fiscal responsibility that a Republican-sponsored bill wouldn’t likely receive the bipartisan support it needs to pass the Senate.
Moller is more confident that Congress can make progress toward shared goals like a smaller deficit-to-GDP target if the upcoming midterm elections result in a divided government.
“[If] we have a divided government, I don’t know how the conversations around fiscal responsibility will evolve… I have greater hope for something like a fiscal commission to be set up in divided government than I do in one-party control,” Moller said.
Brandon Arnold, vice president of the National Taxpayers Union, doesn’t share Moller’s optimism. Arnold thinks, like Republicans say, that cutting government spending is critical to restoring the country’s fiscal health and would have to be part of any solution dealing with the debt. And he thinks that the political will doesn’t exist in Congress right now.
Kurt Couchman, senior fellow in fiscal policy for Americans for Prosperity, said he thinks Congress will adopt deficit targets, but the timing is hard to predict.
“The question is whether Congress will adopt them before or after a crisis,” Couchman told The Center Square. “Congress should enact budget targets and fix the process soon, but the timeline for achieving meaningful change is unknowable. The best we can do is to lay the groundwork so solutions are ready when windows of opportunity open.”
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